6 Sep 2010

Run on Kabul Bank feared

2:55 pm on 6 September 2010

Armed police in pick-up trucks have been stationed outside the main branch of Kabul Bank in Afghanistan as customers continue to withdraw money amid fears the bank may collapse.

Barbed wire is in place across the road to hold back the crowds.

The BBC reports a run on the bank began earlier this week after reports of corruption and mismanagement, although officials have maintained the bank will not fail.

The United States Treasury has denied it is preparing to bail out the bank.

Customers have been told that the branch is the only one that holds US currency, but the maximum they can withdraw is $US10,000.

Central Bank governor Abdul Qadir Fitrat told the BBC the queues were only slightly bigger than normal.

He said most people wanted to withdraw their salaries or take out money to pay for presents before the Eid festival.


Kabul Bank, Afghanistan's largest commercial bank, is reported to have run up huge debts that it cannot afford to pay.

Last week, newspaper reports said the bank's two top executives - chairman Sherkhan Farnood and chief executive Khalilullah Ferozi, who each own 28% of the bank's shares - had been replaced.

Mr Farnood was reportedly ordered to surrender $US160 million of property bought in Dubai.

However, Mr Fitrat said they resigned voluntarily as new regulations do not permit shareholders to hold executive positions.